Question 1 1) MCO Manufacturing started in business on 1 January 2017, and incurred the following costs during its first three years: Year ending 31 December 2017 2018 2019 Direct materials 89,000 110,000 120,200 Direct labour 68,000 64,000 65,000 Variable overheads 42,000 50,000 56,000 Fixed manufacturing costs 80,000 90,500 101,200 Sales during the first three years were all at RM30 per unit Production each year (units) 25,000 24,000 26,800 Sales each year (units) 24,000 24,000 27,000 Required: a) Prepare a statement showing the gross profit for each of the three years if the company used: the marginal costing approach. ii. the absorption costing approach. (12 marks) b) Explain briefly the reasons for the difference between recorded profits under those different approaches. (3 marks) 2) Healthyjuiceworks Sdn Bhd manufactures juice machine for domestic use. The management of the company is considering next year's production and has asked you to help with certain financial decisions. The following information is available: Sellin rice er machine 120 Direct materials er machine 45 Direct labour er machine 30 Fixed roduction overheads 270,000 er ear The company is planning to manufacture 25,000 juice machines next year: a) Calculate the marginal cost per juice machine. b) Calculate the absorption cost per juice machine. (5 marks)